M/S Maa Shyampati Construction vs. The Union Of INDIA

Held

The Court quashed and set aside the impugned orders dated August 5, 2022, passed by the Additional Commissioner of State Taxes (Appeals), and the original orders dated January 27, 2020, November 23, 2021, and February 13, 2021, as well as the demand notices. The Court found that the ex parte orders were passed in violation of the principles of natural justice, as the petitioner was not afforded a fair opportunity of hearing and the orders lacked sufficient reasoning. The Court also noted that the delay in filing appeals was sufficiently explained by COVID-19 restrictions. The Court directed the petitioner to deposit ten percent of the total amount demanded before the next date, and additionally ten percent of the amount of demand within four weeks, without prejudice to the rights of the parties. The bank accounts of the petitioner were to be de-frozen. The Assessing Authority was directed to decide the case on merits after complying with the principles of natural justice, affording adequate opportunity to all parties, and passing a speaking order within two months of the petitioner's appearance. No coercive steps were to be taken against the petitioner during this period. The Court explicitly stated that it had not expressed any opinion on the merits of the case.

Facts

The petitioner, M/S Maa Shyampati Construction, challenged orders passed by the Additional Commissioner of State Taxes (Appeals) on August 5, 2022. These appellate orders rejected the petitioner's appeals against orders dated January 27, 2020, November 23, 2021, and February 13, 2021, passed by the Assistant Commissioner of State Taxes. The appeals were rejected solely on the grounds of being barred by limitation. The original orders were ex parte. The petitioner contended that the delay in filing appeals was sufficiently explained due to COVID-19 restrictions. The revenue stated it had no objection to the matter being remanded for fresh decision on merits, with no coercive steps during pendency.

Key Issues

1. Whether the appeals filed by the petitioner before the Additional Commissioner of State Taxes (Appeals) were rightly rejected on the ground of limitation, considering the explanation provided for the delay due to COVID-19 restrictions? 2. Whether the ex parte orders passed by the Assistant Commissioner of State Taxes violated the principles of natural justice by not affording a fair opportunity of hearing and by failing to provide sufficient reasons for determining the amount due? Petitioner's arguments: The petitioner argued that the delay in filing the appeals was adequately explained by the COVID-19 restrictions. Furthermore, the ex parte orders passed by the Assistant Commissioner were in violation of the principles of natural justice, as no sufficient opportunity for hearing was provided, and the orders lacked proper reasoning to determine the tax liability. Revenue's arguments: The Revenue stated that it had no objection if the matter was remanded to the Assessing Authority for a fresh decision on merits, and that no coercive steps would be taken against the petitioner during the pendency of the case.